Cimarex Energy Co.
) signed an operating agreement with
FieldPoint Petroleum Corporation
) to drill a horizontal well that will target the Bone Spring
formation on its East Lusk Federal Section 15 property located in
Lea County, New Mexico. Cimarex estimates the cost of drilling at
approximately $7 million.
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This proposed horizontal well is to be drilled vertically to a
depth of approximately 9,500 feet to the Bone Spring formation
and laterally in a westerly direction within the formation to the
bottom hole location. Total measured depth of the well is likely
to be approximately 14,000 feet. Cimarex expects to begin
drilling during the first week of Jul 2013.
As per agreement, Cimarex will own a 37.5% stake in the well,
with FieldPoint staking claim to 43.8%. Of the rest, 18.7% stake
would be held by other partners. The duo, if successful in this
venture, plans to drill another well in the same property in 2013
Cimarex is an independent oil and gas exploration and production
(E&P) company. The primary activities of the company are in
the Mid-Continent and Permian Basin areas of the U.S.
The company is focused on increasing shareholder value through
strategies linked to generating attractive economic returns on
capital employed and profitable growth in per-share reserves,
production and cash flow. It intends to profitably grow reserves
and production through a balanced mix of exploration,
exploitation and acquisitions. Cimarex has a diversified base of
high-quality production along with attractive drilling
As is the case with other independent exploration and production
companies, Cimarex's results are directly exposed to oil and gas
prices, which are inherently volatile and subject to complex
The company currently carries a Zacks Rank #3 (Hold). But there
are other E&P companies that are expected to perform well in
the coming 1 to 3 months. These include
EPL Oil & Gas, Inc.
SM Energy Company
) with a Zacks Rank #1 (Strong Buy).